RTA calls commuter tax-break cut 'not good'

The amount of income that commuters who use mass transit will be eligible to shelter from taxes to pay their fares drops on Jan. 1 to $125 a month from the current $230 a month, while the tax-free parking benefit for drivers will increase from $230 to $240 a month, officials said today.

The steep reduction in the transit provision is due to Congress’ failure to renew the higher limit in the Commuter Benefits Equity Act, officials said, adding that they are hopeful lawmakers will approve a higher limit sometime in 2012.

Regional Transportation Authority executive director Joseph Costello called the pending cut in pre-tax transit benefit dollars “a clear inequity that is not good for our cities.’’

The cut in benefits will have a similar effect as a fare increase because riders whose employers participate in the transit benefits program will be able to shield a maximum of $1,500 in income from taxes in 2012, down from $2,760 this year.

The impact on Metra riders will be even more severe, because Metra will raise fares on Feb. 1 by an overall average of 25 percent across all fare types.

Metra fares are based on distance. For riders in the middle-distance “E’’ zone, for example, a monthly pass will increase from $116 a month to $149.50. Only $125 in pre-tax income will be applied to the monthly fares in 2012.

CTA riders won’t be as severely affected by the lower limit in the transit benefits program. A full-fare CTA 30-day pass costs $86, well under the new $125 cap. The CTA does not plan to increase fares in 2012, but that could change depending on the success of planned cost-cutting moves to reduce a projected budget deficit.

The transit benefit is intended to serve as an incentive to ride trains and buses instead of drive.

The program enables companies and employees to buy CTA transit cards, CTA Chicago Cards or RTA FareChecks, which vouchers that pay for transportation anywhere on the RTA system, including Metra, the South Shore line and certain Amtrak routes. Monthly passes and 10-ride tickets for Metra also are available.

The monthly tax-free parking benefit in 2012 will increase by $10, to $240, due to a cost-of-living allowance. Transit benefits were temporarily increased in 2010 to $230 a month from $120 as part of the Obama administration’s economic stimulus program.

But Congress did not extend the $230 a month transit benefit, so the amount will revert to $120 plus a $5 cost of living increase next year, officials said.

The RTA is urging transit participants to contact their elected representatives, or go to www.commuterbenefitsworkforus.com, and ask that the transit benefit be increased to match the parking benefit.

Commuters who have questions can also call the RTA at 800-531-2828, or their employer’s human resource department.

Metra is telling its customers who participate in the transit benefit program and use Metra’s ticket-byInternet service for recurring orders to verify that their transit benefit account is adequately funded, to ensure that Metra tickets continue to arrive by mail.

“If passengers use a transit benefit check and the amount does not cover their fare media, they will be able to use a personal check, credit card or cash to supplement their check at the ticket window,’’ a Metra spokeswoman said.